How to Minimize the Cost of Filing Your Tax Return Late

You can minimize the cost of filing your tax return late.  It’s easy.   Each year many Americans, for various reasons, do not file their tax returns by the deadline. Some do this because they just procrastinated too long.  Others because they owe money they don’t have.  Rather than seek out IRS tax debt relief, they ignore the issue completely.  No matter what your reason, you will not want to procrastinate any longer. The sooner you take action, the fewer fines and penalties you will end up paying.

At this point, the first thing to do is to take the time to gather up all of the documents you need to file your taxes and get them organized. Tax preparers are still willing and able to help you file your overdue return, or you can do it on your own. No matter which option you choose to prepare you taxes, electronic filing is your best bet at this point. This way the IRS will receive it right away.

For those individuals who filed for an extension before the tax deadline, know that you will now have until October 15 to file your return. It is, however, important to note that filing for an extension has bought you an extra six months time to prepare and file your taxes, but it has not granted you more time to pay what you owe.

If you know you are going to owe money, you need to estimate what the amount will be and send it in immediately. An extension does not mean that you can wait to pay; it just means that you can wait to file.  Often it’s better to start borrowing money from any source you can at this point.  Just don’t ignore your debt to the IRS.

Late fees and penalties on what you owe and have not paid started at 12:01 am on April 16.

If you have not filed your taxes because you know you cannot pay the amount due, you will need to explore payment options quickly and take swift action. Not being able to pay is not an excuse, and stiff penalties and fees will accumulate quickly.

Can you borrow the money from a retirement fund? Do you have a savings account you could take the money from? How about a family member who might be willing to loan you the money? If you do not have any way to come up with the money, then your next best option is to go to the IRS website and file an online installment payment agreement.

If you owe less than $25,000, you can easily apply online for the IRS payback installment plan. Approvals usually come in about 10 days. You will then be able to pay back what you owe in a monthly payment plan. There is a small fee for setting up the account, but it is certainly worth it to avoid higher penalties.

If you are a late filer who is due a refund, consider it your lucky day. There are no penalties or fees for filing late, but there is a statute of limitations on how much time you have to collect. Your best bet is still to prepare and file your taxes immediately.

This is a guest post by Debbie Dragon at Taxdebthelp.com, a site designed to help with tax debt.